United States Department of the Interior BUREAU OF OCEAN ENERGY MANAGEMENT

Gulf of Mexico OCS Region 1201 ElmwoodPark Boulevard New Orleans, LA 70123-2394

In Reply Refer To: MSGM266A September 15, 2017 Bond No. 1151981

Mr. Peter E. Salas Hoactzin Partners, L.P. P.O. Box 16867 Femandina Beach, FL 32035

Dear Mr. Salas:

We acknowledge receipt of your letter dated September 12, 2017, received by Bureau of Ocean Energy Management on September 13, 2017, submitting your replacement Outer Continental Shelf (OCS) Pipeline Right-of-Way Bond No. 1151981 in the amount of $300,000 executed on August 15, 2017 with Hoactzin Partners, L.P. as principal, and Lexon Insurance Company as surety, conditioned to cover principal's pipeline operations in the Gulf of Mexico.

This bond replaces your Outer Continental Shelf (OCS) Pipeline Right-of-Way Bond No. SUR0011280, in the amount of $300,000 executed on June 1, 2013, with Hoactzin Partners, L.P.as principal and Argonaut Insurance Company as surety, conditioned to cover principal's pipeline operations in the Gulf of Mexico.

The period of liability of Bond No. SUR0011280, is considered to have terminated, effective August 15, 2017, the date the replacement bond was executed, and the bond is cancelled the same date without residual liability. The replacement Outer Continental Shelf (OCS) Minerals Lessee's or Operator's Bond No. 1151981, is considered to be effective August 15, 2017.

The replacement bond, Bond No. 1151981, conforms to the requirements of the leasing and operating regulations for submerged lands ofthe Outer Continental Shelf and has been placed in the central file for Outer Continental Shelf bonds maintained in the Leasing and Financial Responsibility Section.

Should you need further assistance, please contact Kathleen Lee at (504) 736-5774 or boemgomrfinancialassurance(5),boem. gov.

Sincerely, R F R M A D F T T • Digitally signed by D C r Y I N r M - ' C I I BERNADETTE THOMAS

E THOMAS SSS 1^ 5

Bemadette Thomas, Acting Chief Leasing and Financial Responsibility Section Leasing and Plans

cc: Ms. Meredith K. Anderson Lexon Insurance Company 10002 Shelbyville Road, Suite 100 Louisville, KY 40223

Mr. George O. Brewster Argonaut Insurance Company 101 Hudson Street, Suite 1201-Jersey City, NJ 07302

Sent Out Via Email To: idevlintajargosuretv.com . wpierson(S),indemco.com . bertus.ins@gmail.com, slupski@alliantinsurance.com

HOACTZIN PARTNERS, LP. 4828 First Coast Highway, Suite No. 5

Fernandina Beach, FL 32034

Telephone: (904) 491-5003

September 12, 2017 ,

Mrs. Kathleen Lee

Bureau Of Energy Management (BOEM)

1201 Elmwood Park Blvd.

Mail Stop 266A

New Orleans, LA 70123

Tel: (504) 736-5774

fr1

•JJ-IF

SEP 1 3 2017

LEASING & FINANCIAL RESPONSIBILITY SECTION

Re: Hoactzin Partners, L.P.

Lexon Surety Bond - Replacements &

Dear Mrs. Lee:

Please find enclosed the corrected / amended Lexon Surety Co replacement bonds for the Argonaut

Surety Co bonds currently on file.

Listed below are the Lexon Surety Bond Nos and the Argonaut Surety Co Bonds they are replacing:

LEXON BOND NO. REPUVCING ARGONAUT BOND NO. BOND

PENALTY BOND DISCRIPTION START DATE

1151986 11 11 SUR0024802 $470,000.00 F-BOEM-OCS SUPP HI 176 8/15/2017

1151987 I I t SUR0024803 $390,000.00 F-BOEM-OCS SUPP HI 176 8/15/2017

1151988 I I I I SUR0024818 $680,000.00 F-BOEM-OCS SUPP HI 176 8/15/2017

1151985 I t l l SUR0024798 $175,000.00 F-BOEM-OCS SUPP SS 144 8/15/2017

1151984 I t l l SUR0024797 $655,000.00 F-BOEM-OCS SUPP SS 145 8/15/2017

1151983 I t t l SUR0011285 $3,000,000.00 F-BOEM-OCS-OPER GOM 8/15/2017

-1151981 It l l SUR0011280 $300,000.00 F-BOEM-OCS-ROW GOM , 8/15/2017

1151989 •I tl SUR0024815 $180,000.00 F-BOEM-OCS-SUPP HI 176 8/15/2017

1151980 l l l l SUR0011279 $450,000.00 F-BOEM-OCS-SUPP HI 196 8/15/2017

.1151991 l l l l SUR0024817 $495,000.00 F-BOEM-OCS-SUPP SS 144 8/15/2017

1151982 l i t l SUR0011284 $450,000.00 F-BOEM-OCS-SUPP WD 62 8/15/2017

1151990 n t i SUR0024816 $380,000.00

$7,625,000.00

F-BOEM-OCS-SUPP WD 62 8/15/2017

Page 2. Cont'd.

As discussed with David Bertus, please forward a eopy ofthe BOEM - Release Of Liability Letters to the following individuals and companies via email:

Mr. John Devlin, Underwriter Argonaut Surety Co 2000 Waterview Drive, Suite 102 Hamilton Township, NJ 08891 E-mail: idevlin(5)argosuretv.com

' Wendy Pierson, Sr. Bond Specialist' IndemCo 777 Post Oak Blvd, Suite 330 Houston, TX 77056 E-mail: wpierson@indemco.com

David Bertus, President First Universal Management Co. 215 N. Moore Road, Suite 6023 Coppell, TX 75019 E-mail: bertus.ins(5)gmail.com

Susan Lupski, Asst. Vice President Alliant Insurance Services 333 Earle Ovington Blvd, Suite 300 Uniondale, NY 11553 E-mail: slupski@alliantinsurance.com

If you have any questions, please do not hesitate to call upon Mr. Bertus with any questions or further information required.

Your help and assistance in this matter is greatly appreciated.

Peter E. Salas

U.S. Department of the Interior Bureau of Ocean Energy Management

OMB Control No.: 1010-0006 Expiration Date: 6/30/2019

OUTER CONTINENTAL S H E L F (OCS) PIPELINE RIGHT-OF-WAY GRANT BOND Bond No.: 1151981

Bond Type: 0 Area w l d e • Additional Security (Check One)_ Amount:

a PA- atf The Surety is the Company Guaranteeing Performance.

Name of Surety: Lexon Insurance Company Mailing Address: 10002 Shelbyville Road, Suite 100 SEP 1 3 2017

Louisville, Kentucky 40223 LEASING & FINANCIAL

If a Corporation, Incorporated in the State of: Texas

X

_; County or Parish of: ravis RESPONSIBILITY SECTION

Check here if Surety is certified by U.S. Treasury as an acceptable surety on Federal Bonds and listed in the current U.S. Treasury Circular No. 570.

The Principal is the Pipeline Right-of-way (ROW) Grant Holder for Whom the Bond or additional security* is Issued. Name of Principal: Hoactzin Partners, L.P.

Mailing Address: Post Office Box 16867, Fernandina Beach, Florida 32035

Schedule A, the OCS area and pipeline ROW grant covered by this bond or additional security*, is comprised of (check one or both):

The following OCS area[(see 30 CFR 550.101 1(b)]: Gulf of Mexico

The following pipeline ROW grant [see 30 CFR 550.1011(a)(2)]:.

In addition to the Obligations of the Principal during the period of liability of this bond or additional security*, the Surety also accepts the following Obligations (check one): x] No Obligations other than the Obligations ofthe Principal during the period of liability of this bond or additional security*. | | All Obligations of all previous Sureties or guarantors even if the Obligations are not Obligations of the Principal during the period of

liability of this bond or additional security*. I | All Obligations of all previous Sureties or guarantors even if the Obligations are not Obligations of the Principal during the period of liability of this bond or additional security* with the following exceptions or limitations (use an attached sheet if needed):

Definitions

For the purposes of this document:

An Obligation includes any obligation arising from any regulations of the Department of the Interior or any Instrument issued, maintained, or approved under the OCS Lands Act, 43 USC 1331 et seq. An Instrument includes any pipeline ROW grant, whereunder the Principal has the right, privilege, or license to conduct pipeline operations on the OCS. A.Person includes an individual, a public or private corporation, a State, a political subdivision of a State, any association of individuals, corporations, States, or subdivisions bf States, or a government agency.

By signing below, the Principal verifies that the information above is correct and agrees to the following: The Principal as agent on behalf of the pipeline ROW grant holder will fulfill all Obligations for the entire pipeline ROW grant and to the same extent as though the Principal were the sole pipeline ROW grant holder for all pipeline ROW grants in Schedule A within an area designated in Schedule A. By signing below, the Surety verifies that the information above is correct and agrees to the following:

1. The Surety does hereby absolutely and unconditionally bind itself to the United States of America acting through and by the Bureau of Ocean Energy Management (BOEM), or such other official designated by the Secretary of the Interior for this purpose, for the performance of all present and future Obligations.

2. The Surety agrees to meet all existing and future Obligations of the Principal on the pipeline ROW grant(s) described in Schedule A or acquired within that area after the effective date of this document at a cost not to exceed $ 300,000.00 unless this sum has been increased or decreased by a rider to this bond or additional security*executed in the same manner as this bond or additional security*.

3. The Surety will be responsible for all Obligations of the Principal in existence at the time this document becomes effective and all Obligations that accrue after that date and until all Obligations are met or until the Regional Director terminates the period of liability of this bond or additional security*.

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PAGE 1 OF 3

OUTER CONTINENTAL S H E L F (OCS) PIPELINE RIGHT-OF-WAY GRANT BOND (Continued)

4. If the Regional Director terminates the period of liability of this bond or additional security*, the Surety will remain responsible for Obligations that accrued during the period of liability until the Regional Director issues a written cancellation of the bond or additional security* in favor of the Surety.

5. If this bond or additional security* is cancelled, the Regional Director may reinstate this bond or additional security* as i f no cancellation had occurred if any payment of any obligations of the Principal(s) is rescinded or must be restored pursuant to

' any insolvency, bankruptcy, reorganization, or receivership, or should the representation of the Principal that it has paid its financial Obligations or performed the other Obligations of the pipeline ROW grant(s)in accordance with BOEM specifications be materially false and the BOEM relied upon such representation in canceling the instrument.

6. The Surety waives any right of notice of this bond or other security*taking effect and agrees that this bond or additional security* will take effect upon delivery to BOEM.

7. The Surety's Obligations will remain in full force and effect, even if: (a) Any person assigns the Instrument covered by this document. (b) Any person modifies an Instrument or Obligation under an Instrument in any manner including modifications that result

from a modification of regulations or interpretations of regulations; or creation of any mortgage, pledge, or other grant of security interest in the Instruments.

(c) Any person, event, or condition terminates any Instrument covered by this bond or additional security*, whether the termination is by operation of law or otherwise.

(d) The BOEM takes or fails to take any action in enforcing, as against any party to the Instrument, the performance of any other covenant, condition or agreement of the pipeline ROW grant, or giving notice of or making demand with respect to such nonperformance.

(e) The Surety suffers any loss by reason of any law limiting, qualifying, or discharging the Principal's Obligation. 8. The Surety agrees to be bound under this bond or additional security* as to the interests in any Instrument retained by the

Principal when the BOEM approves the transfer of any or all of the Instruments. 9. In the event of any default under a pipeline ROW grant, the Surety must perform the Obligations of the Principal upon

demand by the BOEM. 10. If the BOEM decides to commence suit to enforce its rights, it may commence and prosecute any claim, suit, action, or other

proceeding against the Principal and Surety, or either of them, whether or not the BOEM joins the pipeline ROW grant holder or any other party.

11. In the event there is more than one Surety for the Principal's performance of the Obligations, as to any Instrument, the Surety's Obligation and liability under this bond or additional security* is on a "solidary" or "joint and several" basis along with other guarantors or sureties.

12. The Surety agrees to give prompt notice to the BOEM and the Principal of any action filed alleging the insolvency or bankruptcy of the Surety or the Principal, or alleging any violation that would result in suspension or revocation of the Surety's charter or license to do business.

13. The Surety's Obligation and liabilities under this Bond or additional security* are binding upon the Surety's successors and assigns. Nothing in this document permits assignment of the Surety's Obligation without the written consent of the BOEM.

14. The Surety hereby waives any defenses to liability on this bond or additional security* based on an unauthorized Principal

signature.

* Must be approved by the Regional Director

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OUTER CONTINENTAL SHELF (OCS) PIPELINE RIGHT-OF-WAY GRANT BOND (Continued)

Lexon Insurance Company

Name of Surety

Sigmture cf Person Executing for Surety

Meredith K. Anderson, Attorney-in-Fact

Name and Citle typed or printed

10002 Shelbyville Road, Suite 100

Business Address

Louisville, Kentucky 40223

Business Address

Hoactzin Partners, L.P. By: Dolphin Advisors (Hoactzin), LLC, its Manaqin/f^artrlSir

Signature of Person Executing for Principal

Peter E. Salas, President Name and title typed or printed

Post Office Box 16867

Business Address

Fernandina Beach, Florida 32035

Business Address

Signed on this day of ., 20 J L L _ , in the State of ^ 6 X 8 3 in the presence of:

Signature of Witney

Wendy Pierson Signature of Witness

Name typed or printe Name typed or printed

777 Post Oak Blvd., Ste. 330 Address

Houston, Texas 77056 Address Note: The party signing for the Surety must attach a corporate resolution and power of attorney stating his or her authority to undertake this Obligation, pursuant to the acts of the corporate board of directors and the laws of the state of incorporation. The corporation executing this bond as Surety and the pipeline right-of-way grant holder, if a corporation, must affix their corporate seals.

3^ MicUoU Av/t

Address

Address

Paperwork Reduction Act of 1995 (PRA) Statement: The PRA (44 U.S.C. 3501 et seq.) requires us to inform you that BOEM collects this information to hold the surety liable for the obligations and liability of the Principal (pipeline right-of-way holder). Responses are required to obtain or retain a benefit. Proprietary data are covered under 30 CFR 550.197. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. Public reporting burden for this form is estimated to average 15 minutes per response (in the Alaska and Pacific Regions, this could take longer), including the time for reviewing instructions, gathering and maintaining data, and completing and reviewing the form. Comments regarding the burden estimate or any other aspect of this form should be directed to the Information Collection Clearance Officer, Bureau of Ocean Energy Management, 45600 Woodland Road. Sterling, VA 20166.

BOEM-2030 (June 2016) Previous Editions are Obsolete.

PAGE 3 OF 3

POWER OF ATTORNEY

Lexon Insurance Company LX-297127

KNOW ALL MEN BY THESE PRESENTS, that LEXON INSURANCE COMPANY, a Texas Corporation, with its principal office in Louisville, Kentucky, does hereby constitute and appoint: Edwin H. Frank, III, Michele K. Tyson, W. Russell Brown, Jr., Meredith K. Anderson its true and lawful Attomey(s)-ln-Fact to make, execute, seal and deliver for, and on its behalf as surety, any and all bonds, undertakings or other writings obligatory in nature ofa bond.

This authority is made under and by the authority of a resolution which was passed by the Board of Directors of LEXON INSURANCE COMPANY on the I 5 ' day of July, 2003 as follows:

Resolved, that the President of the Company is hereby authorized to appoint and empower any representative of the Company or other person or persons as Attorney-in-Fact to execute on behalf of the Company any bonds, undertakings, policies, contracts of indemnity or other writings obligatory in nature of a bond not to exceed $3,000,000.00, Three Million dollars, which the Company might execute through its duly elected officers, and affix the seal of the Company thereto. Any said execution of such documents by an Attorney-in-Fact shall be as binding upon the Company as if they had been duly executed and acknowledged by the regularly elected officers of the Company. Any Attorney-in-Fact, so appointed, may be removed for good cause and the authority so granted may be revoked as specified in the Power of Attorney.

Resolved, that the signature of the President and the seal of the Company may be affixed by facsimile on any power of attomey granted, and the signature of the Assistant Secretary, and the seal of the Company may be affixed by facsimile to any certificate of any such power and any such power or certificate bearing such facsimile signature and seal shall be valid and binding on the Company. Any such power so executed and sealed and certificate so executed and sealed shall, with respect to any bond of undertaking to which It is attached, continue to be valid and binding on the Company.

IN WITNESS THEREOF, LEXON INSURANCE COMPANY has caused this instrument to be signed by its President, and its Corporate Seal to be affixed this 5th day of August, 2015.

LEXON INSURANCE COMPANY

David Ef 'Campbel l '^ President

ACKNOWLEDGEMENT

On this 5th day of August, 2015, before me, personally came David E. Campbell to me known, who be duly sworn, did depose and say that he is the President of LEXON INSURANCE COMPANY, the corporation described in and which executed the above instrument; that he executed said Instrument on behalf of the corporation by authority of his office under the By-laws of said corporation.

AMY TAYLOR Notary Public- State of Tennessee

Davidson County Mv Commission Exoires 07-08-19

CERTIFICATE

I, the undersigned, Assistant Secretary of LEXON INSURANCE COMPANY, A Texas Insurance Company, DO HEREBY CERTIFY that the original Power of Attomey of which the forgoing is a true and correct copy, is in full force and effect and has not been revoked and the resolutions as set forth are now in force.

Signed and Seal at Mount Juliet, Tennessee this ( "S iV* Day of

BY Andrew Smith

Assistant Secretary

"WARNING: Any person who knowingly and with intent to defraud any insurance company or other person, files and application for insurance of claim containing any materially false information, or conceals for the purpose of misleading, information concerning any fact material thereto, commits a fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties."